A fresh overcharging allegation against AIB is being investigated by the bank and the Irish Financial Services Regulatory Authority (IFSRA). Colm Keena and Siobhán Creaton report
This allegation again concerns rates charged to foreign exchange customers and the possibility that AIB branches that were not meeting their targets altered their exchange rates to increase profits.
The latest blow to hit the bank has emerged as the governor of the Central Bank, Mr John Hurley, disagreed with an assessment by the chairman of AIB that bank representatives should not appear before an Oireachtas committee at this time. It also comes as the Taoiseach told the Dáil he found it hard to believe that those at the top in these institutions could be involved in offshore investments without knowing anything about it.
There were also, Mr Ahern said, worries of damage to the reputation of the Irish financial services industry as a result of the AIB affair and he questioned the performance of AIB's internal auditors.
Mr Dermot Gleeson SC, chairman of AIB, responded to the invitation from the Joint Committee on Finance and Public Services by saying he supported the view of the chief executive, Mr Michael Buckley, that the bank should not appear before the committee until after its investigation into overcharging was completed.
The committee had twice earlier written to Mr Buckley.
Mr Hurley appeared yesterday before the committee to discuss issues arising from the overcharging by AIB of certain foreign exchange customers. He said he found the disclosures concerning AIB "to be both very serious and deeply disappointing".
Responding to Mr Conor Lenihan TD, Mr Hurley said in his view there was no impediment to AIB representatives appearing before the committee "as long as the committee does not prejudice the investigation".
The news that AIB had been charging double the margin notified to the authorities for certain foreign exchange transactions broke two weeks ago and led to the establishment of an inquiry overseen by Mr Lauri McDonnell, the former comptroller and auditor general.
It emerged yesterday that IFSRA's investigation into overcharging, which is ongoing, has discovered that certain AIB branches may have been charging more than the general foreign exchange rates that applied throughout the group to increase their profits.
The Consumers' Association of Ireland released a copy of a memo sent to AIB branches by the former general manager, Mr Pat O'Mahony, in 1991. The memo tells branches that the correct foreign exchange rates should be applied. A former AIB manager told the CAI this was designed to end the overcharging practice.
The Office of the Director of Corporate Enforcement has said it is investigating matters to do with AIB Investment Managers Ltd (AIBIM), the AIB subsidiary involved in the Faldor controversy.
Faldor was a British Virgin Islands company used for investments belonging to five former AIB directors which were handled by AIBIM. When it was put to the Director of Corporate Enforcement, Mr Paul Appleby, that one of the issues his office would be looking at was the possible facilitation by AIBIM of tax evasion by its clients, Mr Appleby said that was "a reasonable conclusion to be drawn" from what is known, but would not comment further.